FinancialModeling: Schedule Department of Finance at the University of Illinois
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Models

In the course of the semester we will do as many of the models on the menu as possible. The categories of models we cover does change from semester to semester. Which models we cover will depend on the interest and skill level of the members of the class.

Models

Introduction

  • Methodology & Formats
  • Multiplication Table
  • The Finance Ribbon
  • Company Colors

Time Value of Money

  • The Effects of Compounding
  • Present and Future Value of a Growing Annuity
  • Mortgage Model
  • Bubble Charts

Capital Asset Pricing Distribution

  • Model structure with linking data files
  • Stock Market Charts
  • Returns, deviations, and downside deviations
  • The Market Model and dynamic regression
  • Capital Asset Pricing Model

Financial Statement Forecasting

  • Financial Statement Models
  • Forecasting
  • Forecasting with Short Term Debt and Cash as the Plug
  • Forecasting with Capital Structure as the Plug
  • Sensitivity Analysis
  • Scenario Analysis
  • WACC, growth, and Discounted Free Cash Flow Analysis

Comparables Models

  • In range Charts: Thermometers, Simple and Complex Football charts
  • Importing Data from Capital IQ
  • Comparables Charting
  • Heat Map

Bond Prices

  • Pricing Bonds on the Yield Curve
  • One period Bond pricing under risk of default
  • Manipulating the Ratings Transition matrix
  • Expected Yields with Ratings transitions, Recovery Rates, and partial periods
  • Calculating Bond Beta using S&P transition matrix and Moody's recovery rates by industry

Monte Carlo Methods

  • Random Numbers and Monte Carlo Methods
  • Statistics
  • Controling the random number generation

Options

  • Binomial Pricing Model
  • Black Scholes Pricing Model
  • Estimating Stock Price Volatility
  • How Normal is the distribution of the returns distribution?

Stock Price Distribution

  • Simulating Stock prices with a simple Markov process
  • How Normal is a simple Markov process?

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